U.N. Reports on Wages in Israel; Finds Them Higher Than in Germany, France

In proportion to population, Israeli industry out produces Turkey and Egypt, pays its workers higher wages, and is growing faster in manufacturing, according to a report issued here today by the United Nations Department of Economic and Social Affairs. However, the report states due to its rapid rise in population–both through a relatively high birth rate and through large-scale immigration–Israel “is now faced with an urgent and difficult development problem.”

Wages in Israel, states the report, “are not only higher in Israel than in Egypt or Turkey, but also higher than in several more industrialized countries.” Comparable statistics in the report show that, in manufacturing, the average hourly earning of an Israeli worker is 48 cents, while it is 27 cents in Turkey, and II cents in Egypt. Israel’s hourly manufacturing wage-rate is shown to exceed Western Germany’s, where it is 40 cents; and that in France, where it is 38 cents.

However, the report continues on this score, “while labor costs in Israel are comparable with those in Western European countries, production per worker (in Israel) is much lower.” Israel’s labor productivity is “perhaps only about 50 percent of that in many industrial nations,” the report declares, “and probably in the vicinity of 25 percent of productivity in the United States.”

“In general,” the report says, “the technical competence of the entrepreneurial class (in Israel) seems to be on a much lower level than their commercial skills. Most members of the entrepreneurial class are immigrants from Europe, few of whom have had previous industrial experience. The majority of present entrepreneurs started as merchants or artisans whose workshops have expanded into small factories.”

STRESSES SHORTAGE OF SKILLED PERSONNEL IN ISRAEL’S INDUSTRY

While Israeli industry “can be said to be better equipped generally than in Egypt and Turkey,” the report holds that, in Israel, “much obsolete equipment exists in some branches, notably weaving, printing and foundries; and the small size of plants in these and other branches is an obstacle to the use of the technically most efficient machinery. “The report adds that the Israel Government “is currently encouraging mergers in one industry, weaving, in order to make possible use of more efficient equipment, and to facilitate its financing.”

The report states further: “In Israel, before 1948, many immigrants were skilled workers, and industry was relatively well supplied. But thereafter, the proportion of skilled immigrants fell, as the composition by country or origin changed. Most new immigrants must receive some training before they can be employed. In addition, the egalitarian wage system, which minimizes the differential in wages between skilled and unskilled, has discouraged the acquisition of skills. There is thus at present a shortage of trained personnel in Israel.”